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Quarterly National Accounts and International Accounts Quarter 2 2020

GDP contracted by 6.1% in Q2 2020
  • Personal Consumption of Goods and Services, a key measure of domestic economic activity, decreased by 19.6% in the quarter
  • Spending by Government on goods and services increased by 7.5%
  • Contraction of 38.3% in the economic activity of the Construction sector, while the multinational dominated Industry sector grew by 1.5% in Q2 2020
  • GNP contracted by 7.4% in the quarter
  • The Balance of Payments Current Account recorded a surplus of €11.7 billion in transactions with the rest of the world in Q2 2020

The Central Statistics Office (CSO) published the Quarterly National Accounts and International Accounts for Quarter 2, 2020.

Assistant Director General with responsibility for Economic Statistics, Jennifer Banim, commented:

‘The impact of the COVID-19 restrictions varied across the sectors of the economy in Quarter 2, 2020. Sectors focused on the domestic market experienced significantly lower levels of economic activity in the quarter, with Construction contracting by 38.3% and the Distribution, Transport, Hotels and Restaurants sector contracting by 30.3%. Growth continued in some of the more globalised sectors, with Industry growing by 1.5%. However, the multinational-dominated Information and Communication sector contracted by 2.3% in the quarter.

Looking at expenditure in the economy, personal spending on goods and services (the PCE indicator) decreased by 19.6% in Quarter 2, 2020 driven by the impact of the COVID-19 restrictions. Government spending on current goods and services increased by 7.5% in the quarter.

Gross Domestic Product (GDP) is estimated to have contracted by 6.1% in Quarter 2, 2020 and the impact of COVID-19 on overall economic activity was partly offset by an increase of €37.8 billion in net Exports of Goods and Services in the quarter, largely driven by a fall in Intellectual Property Product (IPP) Imports. Gross National Product (GNP) – a measure of economic activity that excludes the profits of multinationals – contracted by 7.4%.’

Commenting on the impact of globalisation activities in the quarter, Ms Banim said:

‘Investment in IPP and in aircraft by leasing companies was significantly lower in Quarter 2, 2020. The traditional Final Domestic Demand indictor – a measure of personal, government and investment spending – contracted by 46.9% in the quarter. However, the Modified Final Domestic Demand, which excludes the globalisation effects of relocation of IPP and purchases of aircraft by leasing companies and is an important indicator of underlying demand, decreased by 16.4% in the quarter.

In International Accounts results, the Current Account of the Balance of Payments recorded a surplus of €11.7 billion in flows with the rest of the world in Quarter 2, 2020. Royalty imports for pharmaceutical products and preparations decreased from €5.8 billion in Quarter 2, 2019 to €3.5 billion in Quarter 2, 2020 and the accumulation of the IPP relocations to Ireland in recent years may now be leading to reduced quarterly royalty payments abroad.’

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